The Preferences window lets you set a number of preferences relating to Terragen's operation. It can be opened from the application (Terragen) menu in the Mac version, and the Edit menu of the main window in the Windows version.
The Preferences window has three main parts. On the left is a list of available preference panels. When you click on a panel name in the list the settings for that preferences panel are shown in the area to the right of the list. This is the second main part of the Preferences window, and is called the panel display area. You can find descriptions of each preference panel here.
The third main area of the Preferences window is the strip across the bottom. At the left there is a disclosure triangle labeled "Show more info". When you click on the disclosure triangle the window expands and an information box appears. When you move the mouse over one of the settings in the panel display area, detailed information about that setting is displayed in the information box. It's a little like a tooltip, but with more detail. To hide the information box just click on the disclosure triangle again.
Moving to the right, the next control is the Reset Panel button. Clicking this button will reset the settings in the currently displayed preferences panel to their default values.
Next we have the OK and Cancel buttons. Clicking the OK button will save the preferences and close the window. Clicking Cancel will close the window without saving any changes you might have made.